- The pandemic broke the conventional music business playbook, so Kings of Leon acquired artistic.
- Manager Andy Mendelsohn teamed up with Josh Katz of YellowHeart to design an NFT album launch.
- Katz advised Insider how the tech opens up new potentialities for artists to have interaction with followers.
- See extra tales on Insider’s enterprise web page.
A little bit over a 12 months in the past, Grammy Award-winning rock group Kings of Leon had simply wrapped up recording a brand new album and had been preparing to go on tour to market it when the COVID-19 pandemic introduced the stay leisure business to a grinding halt.
As weeks of delays become months, the group’s supervisor Andy Mendelsohn turned to Josh Katz, founder and CEO of the ticketing platform YellowHeart, to speak about a little-understood idea known as non-fungible tokens (NFTs).
“The playbook for a rock band would be to release an album and go tour, and that was the playbook forever. Now he didn’t know what to do, because there’s no tour,” Katz advised Insider. “So we started chatting about what would a Kings of Leon NFT look like.”
Popular curiosity in NFTs started to collect steam over the summer season in the area of interest crypto artwork market, and Mendelsohn and Katz shortly acquired to work imagining and executing the NFT launch of Kings of Leon’s newest album known as “When You See Yourself.”
In lower than two weeks this March, the album bought over $2 million on the platform and raised a half million to assist out-of-work occasion crew staff.
Insider spoke with Katz about how the collaboration represents an instance of how the music business is charting the future of NFTs to facilitate a extra partaking expertise for patrons and followers.
NFTs supply occasion creators extra management over ticket gross sales
Before the pandemic, the international secondary ticket market was on observe to exceed $15 billion per 12 months, in accordance to Technavio. Numerous middlemen have sprung up over the years, making stay occasion tickets each dearer and fewer dependable. Nearly one in eight tickets purchased on the secondary market seems to be a pretend.
YellowHeart’s platform makes use of the sensible contract options of NFTs to circumvent that problem. For occasion creators it presents extra management over how tickets are used or traded, and for followers it offers higher authentication to guarantee they’re getting what they paid for.
“We didn’t build YellowHeart to do 30 NFT collectibles, we built it to do 3 million Coldplay tickets, where each one is a unique NFT,” Katz mentioned.
In spite of these guarantees, Katz says the early years had been a problem to discover enterprise companions to check out his tech.
“This was always our business model,” Katz mentioned. “But if something’s not broken, people don’t fix it.”
Then, the pandemic occurred, and curiosity surged. Data from Semrush exhibits searches for “NFT” rose over 6,700% from September 2020 to February 2021.
With NFTs, you will get artistic with merchandise gross sales and occasion tickets
For all of its flaws and all of its disruption, the music business was nonetheless making sufficient folks sufficient cash that there wasn’t a broad effort to reimagine how all the components work collectively.
Katz says the shutdown gave folks like Mendelsohn the time and area to take into consideration the artistic potentialities of a brand new strategy to albums, tickets, and merchandise.
“As Andy and I spoke more through the summer, he really came on board with my idea around tokenizing his album,” Katz mentioned. “It came to life very organically.”
Unlike the collectible auctions which have seen skyrocketing costs for unique tokens, Katz says the band needed to make their artwork accessible to everybody via this new format.
“They wanted people to be able to buy the open edition and the limited editions,” he mentioned. “Then there was the offering of the golden tickets.”
For this launch, the NFT a buyer buys basically serves as a coupon, redeemable for album downloads, digital paintings, a pressed vinyl report, or lifetime front-row tickets to Kings of Leon concert events. If you personal the NFT, you’ll be able to declare the advantages.
Also encoded in some of the album NFTs was a fundraiser that channeled $500,000 to a charity in assist of the crew staff who make the total stay music expertise attainable.
NFTs improve accessibility, however the first hurdle is making them approachable to first-time customers
Katz is understandably bullish on the broad implications NFTs have for the world of commerce, however for now he is laser-focused on decreasing the precise (and perceived) limitations round the know-how.
The key to widespread adoption is delivering a enjoyable and satisfying buyer expertise for the early adopters, and Katz says the music business presents the greatest alternative to try this.
“We wanted people who were first-time buyers to understand the world they were entering, that they weren’t just buying an NFT and then it sits in their wallet,” he mentioned.
On the opening weekend, Katz says a number of thousand NFT novices purchased their first token, main some to accumulate a number of extra tokens of totally different sorts earlier than Monday.
“That part was really cool. That was mission accomplished,” he mentioned.
“We wanted to really usher in a new format,” Katz added. “Mendelsohn’s old roadmap of how to do an album drop had gone away, so he and I created what the new version would look like, and here we are.”